Despite yesterday’s political drama from PM Muhyiddin, the local stock market edged up in early Tuesday trade. Chipmakers and tech stocks retook the lead today, followed by local share prices.
The PM resigning, political drama and the pandemic seem not to affect Malaysia’s market sentiments yet.
At Bursa on Monday, foreign funds were net buyers at RM20.8m and retailers at RM97.5m, but local funds net sellers at RM118.3m
Maybank IB Research said the political woes caused by PM Muhyiddin would continue to weigh on market sentiment.
However, Rakuten Trade was more optimistic after the KLCI recovered from its low late Monday as bargain hunting activities emerged.
“It is also interesting to note that foreign funds were net buyers despite the uncertainty on the political front,” it said.
Entire Malaysian Cabinet Resigns
According to a statement by the palace, Malaysia’s Prime Minister Muhyiddin Yassin and his cabinet submitted their resignation to the king on Monday.
The palace’s statement also said that Muhyiddin continues as “caretaker” prime minister until the appointment of a new leader. The palace added that the king thought an election is “not the best option” now due to the Covid outbreak.
In a televised address, Muhyiddin said he resigned because he has lost majority support in parliament. He added that he would not work with “kleptocrats” and interfere with the country’s judiciary process to remain in power.
Muhyiddin said he hopes a new government can be formed soon. He said he hopes the new government will ensure that the economic recovery and Covid vaccine rollout continue smoothly.
Did PM Muhyiddin bow out gracefully?
According to insiders, PM Muhyiddin’s resignation is due to his party withdrawing support. As the PPBM party has the least parliamentary seats, their support was necessary for his political survival. It seems internal support for him was waning since UMNO withdrew its support from their alliance publicly in July this year.